The Thai coup and small business confidence in Bangkok

Thailand’s recent coup was not received favorably in the West, but many parts of Thai society support it. In particular, business sentiment has improved greatly in the short time since the coup. The Bank of Thailand’s monthly Business Sentiment Index (BSI) showed sharp decline in 2013, even before the protests became large. Immediately after the coup, the index was up substantially, although not to levels seen in earlier years. Originally, small business supported Thaksin. After tight policies following the 1997 crash, they liked promises to free up credit for SMEs. Facing severe competition from foreigners buying up cheap post-crisis assets, they liked his policies aiming to promote domestic business. Some pro-small business policies were implemented, some were not, some turned out to lack much substance. But whatever the actual implementation and impact, perceptions came to view Thaksin’s governments as mainly favoring big corporations, especially those connected to Thaksin’s own business interests. It is rarely mentioned in the Western press, but the BSI actually showed a steady downward trend during most of Thaksin’s initial administrations from 2001 to 2006. After the 2006 coup, though volatile, the index made modest gains. When elections returned Thaksin’s proxy party to power in December 2007, it collapsed to its lowest level in nearly a decade. Under the opposition control for several years, BSI recovered, but has mostly been in decline since Thaksin’s Pheu Thai Party took power in 2011. In the past half year, anti-government protests and pro-government counter actions have added to problems for small businesses in Bangkok. Many faced declining sales from the general downward trend in the economy. Some lost sales because customers stayed away if the business was near a protest site, although some could make good sales to protesters. However, the long-term issue was continuing lack of confidence that the government would do much to help small businesses, and feelings that Thailand needed some drastic reorientation. The coup provided that reorientation. Generally, small businesses in Bangkok support it, and believe that Thailand has a chance to get back on the right track now. We conducted in-depth interviews with a number of small businesses near where one of the main protest sites operated, to bring this sort thinking among small businesses out in detail. Generally, whatever side of the color politics they may have been on, mainly they want their small businesses to succeed, and are cautiously optimistic now.